Telecom
Product Recall Risks Growing In Size & Number, Technology Drives New Triggers- Allianz
By peter oluka
Defective product risk is an increasing peril for companies, causing significant financial damage, according to a Allianz Global Corporate & Specialty (AGCS) report.
A faulty pedal causes a car to inadvertently accelerate. An outbreak of contaminated peanuts results in a 25% industry-wide reduction in sales. Each of these incidents triggered major product recalls, resulting in billion dollar losses.
Product-related risk is one of the biggest perils facing businesses today, with recall exposures having increased significantly over the past decade, bringing the potential for larger and more complex losses than ever before, warns insurer Allianz Global Corporate & Specialty (AGCS) in a new report.
It highlights the automotive industry as being the most impacted by product recalls, followed by the food and beverage sector, based on analysis of insurance claims.
“Product recalls have risen steadily in the past decade. We are seeing record levels of recall activity in size and cost today,” said Christof Bentele, head of Global Crisis Management at AGCS. “Tougher regulation and harsher penalties, the rise of large multi-national corporations and complex global supply chains, growing consumer awareness, impact of economic pressures in research and development (R&D) and production and even growth of social media are just some of the contributing factors behind this.”
Defective products not only pose a serious safety risk to the public but can also cause significant financial damage to the companies responsible.
Defective product/work-related incidents have caused insured losses in excess of US$2 billion over the past five years, making them the largest generator of liability losses, according to analysis, of insurance industry claims by AGCS.
Recall claims are a major contributor to this total, alongside product liability claims.
The report “Product Recall: Managing The Impact of the New Risk Landscape” analyzes 367 insurance industry product recall claims from 28 countries across 12 industry sectors between 2012 and the first half of 2017.
Overall defective product or work is the major cause of recall claims, followed by product contamination. The average cost of a significant, incident is in excess of US$12 million (€10.5 million), with the costs from the largest events far exceeding this total.
Over 50% of losses arise from 10 incidents. The IT/electronics sector is the third most affected industry after automotive and food and beverage, according to the claims analysis.
Automotive recalls most expensive and large-scale due to “ripple effect”
Automotive recalls account for over 70% of the value of all losses analyzed, which is unsurprising given recent record levels of activity in both the US and Europe.
“We see an increasing number of recalls with higher units in the automotive industry,” said Carsten Krieglstein, regional head of Liability, Central & Eastern Europe, AGCS. “This is driven by factors such as more complex engineering, reduced product testing times, outsourcing of R&D and increasing cost pressures. The technological shift in the automotive industry towards electric and autonomous mobility will create further recall risks.”
One of the largest recalls to hit the auto industry to date, involving defective airbags, is expected to result in some 60 to 70 million units across at least 19 manufacturers being recalled worldwide. Costs have been estimated at close to US$25 billion.
This incident exemplifies the growing “ripple effect” which impacts the automotive sector, but also other industries. Given the use of many common components, a single recall can impact a whole industry.
Food and beverage is the second most impacted sector, accounting for 16% of analyzed losses with the average cost of a significant product recall claim almost US$9.5 million (€8 million). Undeclared allergens (including mislabeling incidents) and pathogens are a major issue, as is contamination from glass, plastic and metal parts.
Malicious tampering and even extortion incidents pose an increasing threat, as well as the growth of “food fraud”, which has become a major issue, resulting in reputational damage and major losses, as seen in the horse meat scandal in Europe four years ago.
The report also notes that products from Asia continue to account for a disproportionate number of recalls in the US and Europe, reflecting the eastwards shift in global supply chains and historically weaker quality controls in some countries.
Yet increasing safety regulation and consumer awareness is ensuring recall activity is also rising across Asia.
Allianz Global Corporate & Specialty Product Recall Risk Cyber
Technology to prevent and drive future recall risks
The report also identifies emerging recall triggers that will drive future risks and claims, largely stemming from new technologies.
Advances in product testing such as genome-sequencing technology will make it easier for regulators and manufacturers to trace contaminated products in future, potentially saving lives, but also potentially spiking litigation activity, as liable parties can be more easily identified.
Cyber recalls may become an increasing reality. Hackers could change or contaminate a product by controlling machinery in automated production plants.
“Cyber is currently an underestimated risk,” said Bentele. “We have already seen recalls due to cyber security vulnerabilities in cars and cameras.” Innovative but untested technologies such as artificial intelligence and nanotechnology could also transform recall risk.
Social media is a fast and effective way of communicating with customers but can also exacerbate recall risk if not well-managed. “Social media is a real game-changer for product recall,” says Stewart Eaton, Head of Product Recall, UK, AGCS. “An erroneous post or tweet can cause reputational damage and directly impact the size of a recall, meaning companies need to react faster than before.”
Recalls for ethical and reputational, rather than safety, reasons are also on the rise, such as in cases where child or slave labor has been used in the supply chain or where food such as halal or vegan has been mislabeled or counterfeited. “There will be incidents when there is no legal requirement to recall but it is the right thing to do. This is a genuine business risk which companies have to be prepared for,” Bentele said.
Pre-event crisis management as part of corporate DNA
Pre-event planning and preparation can have a big impact on the size of a recall and the financial and reputational damage sustained.
As part of a holistic risk management program, specialized product recall insurance can help businesses recover faster by covering the costs of a recall, including business interruption. It also provides access to crisis management services, and consultants, which can test a company’s procedures and offer global support in areas such as regulatory liaison, communications, product traceability and tampering investigations and even genome sequencing and DNA testing to understand a product contamination.
“There is now much more attention on how companies deal with defective or contaminated products, how responsive they are and how resilient their safety systems are. More than ever consumers are also part of the agenda and are driving company behavior by making their choices subject to how companies deal with crises. A company that embraces crisis management, and makes it part of its DNA, is far less likely to suffer a major incidence,” said Bentele.
Nigeria, through the Nigerian Communications Commission (NCC), has won the 2025 World Summit on the Information Society (WSIS) prize for its project, the Digital Awareness Programme (DAP), under Category C3, which is on Access to Information and Knowledge.
L–R: Executive Vice Chairman/CEO of the Nigerian Communications Commission (NCC), Dr. Aminu Maida, receives the WSIS 2025 Prize (Category C3: Access to Information and Knowledge) from the Secretary-General of the International Telecommunication Union (ITU), Doreen Bogdan-Martin, following the selection of the Commission’s Digital Awareness Programme (DAP) as winner of the category.
The DAP, one of hundreds of projects submitted for the WSIS Prizes competition 2025, received the highest number of votes in its category, earning it the top honour. The programme equips secondary schools across the country with Information and Communication Technology (ICT) resources and provide internet connectivity to support teaching, learning, and research. Since inception in 2006, over 300 schools across Nigeria’s six geopolitical zones have benefitted from the programme.
The Executive Vice Chairman of the NCC, Dr. Aminu Maida, received the award during the WSIS Prizes Winners 2025 Ceremony held on Monday in Geneva, Switzerland.
In his acceptance remarks, Dr. Maida thanked the hosts, the International Telecommunications Union (ITU) and WSIS, for recognising Nigeria’s efforts in promoting inclusive digital access across Nigeria, noting that the award would serve as further motivation for the Commission.
“This recognition is more than a celebration of past efforts—it is an encouragement to press forward. It affirms that investing in digital inclusion is investing in national development, and that Nigeria’s work is being seen and valued on the global stage,” Dr. Maida said.
Four other Nigerian projects—the Women Techsters and the Advanced Digital Empowerment Programme for Tertiary Institutions (ADEPTI) under Capacity Building, the Telecom-Based Research Grant Initiative under Enabling Environment, and the Digital Learning Initiative under e-Learning—were also celebrated for their nomination for the Champions Category of Projects at the WSIS Prizes Ceremony. Although they were not among the top-voted entries, they were acknowledged for their significant merit and impact.
The WSIS Prizes competition recognises and promotes projects that effectively leverage ICTs to advance sustainable development. The competition showcases how technology can serve as a powerful tool for addressing global challenges and achieving the SDGs. Projects from around the world are recognised annually, highlighting diverse approaches to building an inclusive information society.
The World Summit on the Information Society (WSIS) is a United Nations (UN) initiative aimed at building a people-centred, inclusive, and development-oriented information society. It provides a multi-stakeholder platform to address issues related to Information and Communication Technologies (ICTs) and their role in achieving sustainable development.
The Forum is an annual event that brings together high-level representatives from governments, the private sector, civil society, academia, the technical community, and international organisations. It serves as a global platform for implementing the WSIS Action Lines, which are aligned with the UN Sustainable Development Goals (SDGs).
Nigerian Communications Commission (NCC) has given telecom tower operators in the country August 2025 deadline to fix persistent network hitches in their facilities or face regulatory sanctions.
The Executive Vice Chairman (EVC) of the commission, Dr. Aminu Maida, reportedly gave the ultimatum during a high-level meeting with key industry players, attended by representatives of IHS Towers, American Tower Corporation (ATC), and Pan-African Towers, and mobile network operators (MNOs) in Abuja
According to sources, discussions at the meeting focused on the recurring challenges in the telecoms sector, particularly power failures, equipment malfunctions, and insufficient site maintenance, that have been causing poor Internet and call services in the country
Specifically, Maida tasked the tower operators on the imperative of complying with the NCC’s updated Quality of Service (QoS) framework, which now extends performance obligations to infrastructure providers, not just telecom service providers.
According to him, the timeline given by the commission is more than enough time for all parties to align with the performance standards expected of them.
Recently, to ensure compliance with the standards, the NCC introduced a Major Incident Reporting Portal for real-time outage disclosures; developed public performance dashboards to enhance transparency; mandated that telecom tower companies meet strict Key Performance Indicators (KPIs).
Although the tower operators had previously cited delayed payments from MNOs as a reason for service lapses, the NCC had dismissed the justification, insisting that all parties must meet their obligations.
The EVC maintained: “Operators must fulfill both their technical and financial responsibilities. Poor service delivery—regardless of internal disputes—will attract consequences.”
Available data on the telecom tower infrastructure shows that IHS Towers has the largest assets with 16,000–19,000 sites, (62% market share); compared to American Tower Corp’s (ATC’s) about 8,270 towers; and Pan-African Towers’ 760–1,000 sites nationwide.
The latest NCC’s August deadline is believed to be putting pressures on the tower operators to improve the quality of their facilities for improved services as the commission had hinted of its plan to sanction defaulting operators with fines or stricter regulatory actions.
Industry experts believe that the NCC’s directive is a welcomed development as it will ensure reliable Internet connectivity and improved services quality for telecom consumers in the country.
Nigerian Communications Commission (NCC) is set to play a pivotal role at the upcoming 6th edition of the Telecom Sector Sustainability Forum (TSSF 6.0), where it will lead a critical discussion on the sustainable growth of Mobile Virtual Network Operators (MVNOs) in Nigeria.
Set against a backdrop of innovation and opportunity, this forum, organized by Business Remarks, aptly themed “Unlocking Nigeria’s MVNO Potential: Status, Trends, Investment, and Future Prospects,” is scheduled for August 26, 2025. This event reinforces the nation’s commitment to fostering a robust, competitive, and inclusive telecommunications landscape.
The forum will bring together a diverse array of key stakeholders from across the telecom ecosystem to deliberate on strategies for integrating MVNOs effectively into Nigeria’s rapidly evolving digital economy. With the recent advancements in technology and the issuance of 43 MVNO licenses to new players, MVNOs are poised to significantly enhance service delivery, drive digital transformation, penetrate underserved markets, and stimulate healthy competition across the sector.
As the global MVNO market is experiencing significant growth, with projections indicating continued expansion, experts believe that with the right regulatory environment and access to infrastructure, emerging markets like Nigeria can leverage MVNOs to unlock new value for both operators (by utilizing excess network capacity) and customers. Customers can enjoy a rich array of niche value-added services tailored to their needs.
Having been proactive in introducing a five-tier MVNO licensing classification, each with distinct services and a 10-year validity period, signaling a clear path for new entrants, the telecom regulator (NCC) will deliver a keynote address outlining the Commission’s regulatory framework, interventions, and commitment to ensuring a conducive environment for MVNO operations.
Mrs. Bukola Olanrewaju, Convener of the forum and Managing Editor of Business Remarks, emphasized the importance of collaboration. “TSSF 6.0 is designed to be a melting pot of ideas, bringing together Mobile Network Operators (MNOs), MVNOs, telecoms infrastructure providers, Internet Service Providers, industry associations, and technology experts,” she said.
“Our goal is to ignite discussions that will shape the future of MVNOs in Nigeria, ensuring their sustainable growth and their critical role in extending digital prosperity across the nation.”
The forum will feature interactive sessions, thought-provoking panel discussions, insightful paper presentations, and abundant networking opportunities. This event aims to provide a platform for stakeholders to share insights, address challenges, and explore collaborative pathways for sustainable growth.
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